By Dhirendra Tripathi
Investing.com – Stocks of casino operators jumped in Friday’s premarket trading following new proposals from the Macau administration suggesting business continuity for the current licensees on the island.
Wynn Resorts (NASDAQ:WYNN), Melco Resorts (NASDAQ:MLCO) and Las Vegas Sands (NYSE:LVS) were up over 5% each while MGM Resorts (NYSE:MGM) was up 3% premarket. In Hong Kong trading, Sands China (HK:1928) closed 7.1% higher while Galaxy Entertainment (HK:0027) rose 3.4%.
The shares had been under pressure as the companies, with licenses expiring in June, feared they might not be renewed. The proposals do suggest tighter oversight and stricter conditions for operating but rule out an abrupt end to the existing operations, thus removing a key overhang for the stocks.
According to Reuters, the Macau government will issue licenses to six concessionaires with permission to operate for up to 10 years. The government said all existing or potential operators need to apply through a new tender process.
The administration also wants to increase the proportion of local ownership in casino firms to 15% from the current 10%.
Macau lies off Hong Kong and is part of China. Local authorities have earlier called for tighter supervision of casino operators and higher local ownership in gaming companies operating in the region.
China has been clamping down on high-stakes betting in Macau which takes place in convertible Hong Kong dollars. It is believed the gambling trades enable illicit outflow of currency and money-laundering efforts.